Channeling Steve Jobs

I recently finished reading Walter Isaacson's biography of Steve Jobs, the co-founder and visionary leader of Apple. As I read the book, I sought to glean insights on what it was that made Jobs and Apple so fabulously successful over the past 10 years. The answer, the book makes clear, is Job's fanatical and obsessive focus on the user experience: ensuring that Apple products had a broad range of features, were fun and easy to use, and made a statement about the person using them. The superior customer experience that Apple products deliver has enabled the company to grow rapidly while commanding higher prices than its competitors and earning the best profit margins in the consumer-electronics industry.

For Jobs, one of the fundamental principles for maximizing the user experience was maintaining Apple products as closed systems. Apple products are designed as an integrated system such that only hardware and software developed or approved by Apple will work with them, thus ensuring that all elements will work well together. This is in sharp contrast to the PC world, in which computers running the Microsoft Windows operating system can accept peripheral equipment and run software programs from thousands of suppliers. The open system environment of the PC world gives the customer far more choices than Apple's closed system, but is more likely to lead to problems, such as system crashes and the inability to print documents because of compatibility problems between the various pieces of hardware and software. The open environment also has led to the commoditization of the products themselves, driving down prices and making the PC world marginally profitable at best.

APPLYING APPLE CONCEPTS TO CONTRACT SERVICE PROVIDERS

The closed-system idea struck a chord because of its potential relevance to the integrated service model taking hold in the contract services industry. Both large and small bio/pharmaceutical companies are embracing the idea of buying services as a bundle rather than on an individual basis, for example, having the same contractor develop and manufacture early clinical supplies of the drug substance and drug product. For small bio/pharmaceutical companies, the bundled model offers the opportunity to get their development candidates to the proof-of-concept decision point much faster while overcoming their deficiencies in project management and development expertise. For large bio/pharmaceutical companies, buying a package of services promises to reduce the costs of identifying, qualifying, and managing a network of service providers by reducing the total number of providers in the network.

This trend from the "open system" world where bio/pharmaceutical companies themselves had to work out scheduling and compatibility issues among service providers to the "closed system" of integrated service providers (ISPs) can be transformational for drug development and for the service providers themselves. For the ISP model to really work, service providers must take ownership of the entire customer experience. So, executives of CROs and CMOs offering a one-stop-model must dedicate themselves to answering three key questions:

Question 1: How do customers define a superior experience?

Question 2: Now that we have all of the elements under our control, what can we do to make them work together to provide the best possible customer experience?

Question 3: How do we demonstrate the value of our integrated offering so as to convince the customer to pay a premium price for it?

Precisely defining a superior customer experience will probably require some market research, and the answer will differ across customer types and service offerings. We can be pretty sure, however, it will center around value, price, meeting deadlines, communication, and technical expertise. Once these have been defined, successful companies will develop metrics to measure them and manage to those metrics.

The key to answering the second question is the ability to break down the functional silos that have characterized drug development. The different functional areas have traditionally "thrown the project over the wall" to the next sequential step in the development process, such as when the process chemists ship the API to the toxicologists for preclinical testing or to the formulators for drug-product development. An ISP focused on the customer experience will ensure that the different functional areas work closely together from the start in both technical matters and project management and scheduling. For instance, the ISP will have its medicinal chemists and formulators work together early in the process to identify and resolve potential solubility issues.